Nick Leeson: No lessons learnt from banking scandals

Twenty years after Nick Leeson brought down Britain's oldest investment bank, the rogue trader immortalised in book and film says little has changed in an industry that continues to throw up one scandal after another.

Leeson, whose £827m ($1.3bn, €1.1bn) loss as a Singapore-based junior derivatives trader led to the 1995 collapse of Barings Bank and earned him more than three years in prison, told Reuters that the root of the problem remains a banking culture that will not change until there is genuine fear of punishment for misconduct.

"You know the story is one of incompetence and negligence on a grand scale. I think every time you see financial scandal, be that rogue trading, be that global financial collapse, it's poor systems, poor controls and poor people. You know, I think it characterises absolutely everything that you see, everything that's wrong that happens in the marketplace," he said.

A number of high-profile cases have resulted in prison sentences for the likes of former Societe Generale trader Jerome Kerviel and former UBS trader Kweku Adoboli, while the industry has paid £107bn in fines for a string of scandals from rate rigging to swaps mis-selling.

And Leeson says it will happen again.

"I think it's inevitable that it will happen again. You look at what's happened over the last 20 years, you know, there's been a lot of focus on the individuals that have committed the crimes, and they are crimes, there's no way of excusing that. People have looked at bonuses, you know, you've had Treasury Select Committees and now we're fining the banks. You know, the banks have been fined 166 billion dollars in the last six years. And it's not working."

On Wednesday HSBC bosses were grilled by a British parliamentary committee over failings in the operations of its Swiss private bank, which has been accused of allowing clients to dodge taxes.

Leeson also believes that the calibre of people overseeing sometimes extremely complex and esoteric financial instruments needs to be strong enough to spot potential pitfalls.

"It's ok to scapegoat Nick Leeson because he was individual. It's ok to scapegoat Kweku Adoboli, fines of the organisation aren't working. But maybe, you know, the chain of command needs to be looked at a lot more and they need to be held accountable for the culture and the activities that exist within their organisation."

Leeson now earns most of his living from talking engagements, from risk-management presentations for corporate clients to after-dinner speeches about his experiences.